Many Canadians are using their investment funds to enter the real estate market, and there are a number of different ways to invest in this growing sector. The years since the housing collapse of 2008 and 2009 created an aura of fear around this part of the economy. However, prices are finally starting to crawl upward again, and interest rates are still at the lowest levels that have ever been available in Canada. This means that you are likely to invest in a property that will appreciate over a short term, allowing you to “flip” a property and end up with a tidy profit in the process. If you are like most investors, though, you don’t have the ready cash to buy a house or multi-unit property. Instead, you’re going to rely on a mortgage to pay the financing. You’re not necessarily looking to carry the mortgage for a long time, particularly if you’re trying to re-sell the property quickly, but you do need to know what is involved with applying for and obtaining a mortgage for your investment property.

One topic that many investors wonder about has to do with the interest rates that you’ll have to pay on your investment property mortgage and the size of the down payment that you will have to make in order to secure the loan. This varies, depending on how large the property is that you plan to buy, and whether or not you plan to live on site.

When it comes to interest rates, the magic number is 4. That isn’t the interest, though; that’s the most units you can have in a rental property while keeping the zoning residential. This is important because if you have to go to a property with commercial zoning, you’re no longer looking at a residential mortgage. Instead, you are looking at a commercial mortgage, which comes with a significantly higher rate and a qualification process that is much more onerous. So if you’re ready to move into owning properties with a lot of units, make sure you are prepared for that process.

Investment Property Mortgage Rates

The other question that is important when it comes to Investment PropertyMortgage Rates is the place you choose to live. If you’re purchasing a property that is zoned residential and has four units or fewer, and you plan to occupy one, then you have a process that is basically the same to buying your own single-family home or condo as a principal place of residence. Not only will you have access to the same interest rates as everyone else who is simply buying a home for themselves, but you’ll also have the ability to put as little as 5 percent down toward the purchase price when you are closing the deal (a property with three or four units would require 10 percent down).

So if you’re looking to buy a duplex and live in one half of it, then the process is virtually identical to buying a house with just one unit. As of 2014, you can get fixed mortgages for as little as a 2.49 percent interest rate, which is a great rate of interest to pay for borrowing money for your first investment in real estate. That is a very reasonable cost for credit, particularly in a market that is seeing home prices start to increase. This means that you can buy in now, and in a couple years when the market has gone up, you can sell it at a tidy profit, or you can adjust the rent upward in line with the market. Either way, now is a terrific time to take a look at an investment property.

If you feel that you are ready to make the move into the move into the real estate market, contact Amansad Financial about the many investment property mortgage options out there for you. We will talk to you about whether a move into real estate fits your current financial situation and then will suggest lending solutions to help you get into the business with the lowest cost in terms of closing fees and interest rates. We have helped clients in western Canada get the most out of their investment in real estate, and we look forward to serving you as well.